Poverty, growth and baseless anger

The economics of misplaced anger

Fast growing Asian countries have “eliminated” poverty at an astonishing speed, bringing people out of extreme poverty into mere gut-reaching poverty.

At first blush, the numbers are suggesting of a hopeful future. In 1990, about a third of the people in the world lived on less than US$1.90 a day. By 2013, it was just 10.7%. In actual numbers, that is 1.85 billion in 1990 compared to 767 million in 2013. A second glance puts in perspective the anger of many people in the world, and not in a good way.

In 1990, the bulk of global extreme poverty was in Asia, the most populous region in the world. Now it is in Africa, the most troubled region in the world.

We wrote about this with my colleagues in a series of stories in China Daily Asia Weekly last month to mark International Day for the Eradication of Poverty, which falls on 17 October. The World Bank says the number of people living in extreme poverty is falling by 88 million per year.

Before we start celebrating, though, let’s go back to that US$1.90 a day, which adds up to US$57 for a 30 day month or a whopping US$693.50 a year. To meet the threshold, a family of four would have to earn US$2,774 per year or US$231 per month. It is hard to imagine any place in the world where that is anywhere near enough.

So what we are talking about here is bringing people out of the most abject and dire financial circumstances into something a slightly less abject. They might just have enough rice to eat, but certainly no chance at living lives of fulfilment in the way Westerners see it.

In the weeks after the U.S. election, when tens of millions of wealthy white voters came out of the woodwork in the only superpower left in the world, that number – the US$1.90 – takes on an added significance. The average earnings for those “disenfranchised” angry voters are in the neighbourhood of US$70,000 per year. They have homes and cars and phones and food and Christmas presents and security and McDonald’s Happy Meals with little toys in them, watches, bicycles, clothes and warm jackets, occasional holidays and, perhaps most of all, opportunity for advancement. They earn 25 times as much as those now-not-so-poor people elsewhere in the world.

Context is important.

It is surely a good thing that so many people in the world now earn more than they did but much, much, much remains to be done.

Equality is, of course, little more than an idea. Many of us are much more equal than others and will remain that way for generations. Maybe we can at least be open to the idea that life in the wealthier countries in the world is not all that bad and the anger that has risen to the surface in the U.S., the U.K., France, Hong Kong and other places is not unlike that of a child that had ten candies but now only has nine, one less than he used to have but still eight more than he actually needs.